AstraZeneca hurt as Europe patent on Nexium is rejected

AstraZeneca has been left stunned by the news that a major patent on the blockbuster antiulcerant Nexium has been revoked.

The European Patent Office ruled that one of the company’s substance patents for Nexium (esomeprazole), which was due to expire in 2014, will be rejected, following an appeal by German generic manufacturer Ratiopharm. Details of the decision, which cannot be appealed, will be revealed next year, while a process patent hearing will take place on March 7.

AstraZeneca acknowledged that it was disappointed with the decision but claimed that it "has confidence in the intellectual property portfolio protecting Nexium." This includes process, method of use and additional substance patents with expiration dates ranging from 2009 to 2019 and in addition, the drug has data exclusivity valid until 2010 in major European markets.

The importance of Nexium to AstraZeneca's fortunes is considerable, given that the blockbuster brought in revenues of $4.6 billion last year, with just less than a quarter coming from Europe. Its sales have helped soften the blow of a number of pipeline failures suffered by the firm, the most recent being the failure of NXY-059, a candidate drug for stroke, to meet its objectives in a Phase III trial.

More pipeline problems

Recently AstraZeneca has also dropped an intravenous formulation of AZD7009 for the treatment of atrial fibrillation after disappointing Phase III results, and has also been hurt by the failure of Galida (tesaglitazar) for diabetes and the withdrawal from the market of blood clot preventer Exanta (ximelegatran) after liver side effects were seen in some patients.

The company's shares fell sharply on the news, ending the day 4.4% down at £27.38 and analysts are looking at how Nexium's patents are likely to stand up in the USA. In March, AstraZeneca sued Teva and its Ivax Corp unit for infringing its patents on Nexium, having already filed a lawsuit against Ranbaxy Laboratories. These cases have yet to come to trial but the validity of AstraZeneca's US patents may come under closer scrutiny following the EPO decision.